Activity in the service sector fell for the fourth consecutive month in October, according to new economic data. The events of September 11th exacerbated the effects of the general economic slowdown on Irish service industries last month according to NCB Stockbrokers' monthly survey of the sector.

The October business activity index compiled by NCB for the services sector recorded its lowest level in its one- and-a-half-year history. The most dramatic falls were recorded in business services, travel and tourism.

Despite the fall in activity, the survey did show an increase in confidence amongst services firms, although confidence remained significantly below the levels seen this time last year. "The reversal of last month's sharp downward trend was reported to reflect a more rational view of the recent terrorist attacks in the US, and their likely implications for the Irish services industry," according to NCB.

New business levels fell sharply as firms reported that clients were less enthusiastic about investing in new products. Increased competition among service providers for new business has pushed down prices for the first time since the survey started in May 2000. "Of those firms reporting reduced charges, the majority implied that the current competitive pressures in the market had forced them to offer their services at a discount - in order to maintain custom and persuade clients to sanction new investment spending."

The survey found that service businesses have started to lay staff for the first time since May 2000.

NCB, together with the Irish Institute of Purchasing and Materials Management, surveyed 535 private sector service companies in business services, financial services, technology, media, transport, travel, tourism and leisure.